A basic forex question

[suchak]

As far as I understand the yield on a currency pair is the interest rate on one pair minus the other. If the value of the currency falls, would that increase the yield? For example if Aussie dollar yields approx 4% vs usd and aud falls in half value would it now produce 8% yield?

 

[Martinghoul]

Re: A baSic forex question

There's really no such thing as "yield on a ccy pair".

 

[ha0dho]

As far as I understand the yield on a currency pair is the interest rate on one pair minus the other. If the value of the currency falls, would that increase the yield? For example if Aussie dollar yields approx 4% vs usd and aud falls in half value would it now produce 8% yield?

Nope

What ur talking about is a carry trade

http://www.investopedia.com/terms/c/currencycarrytrade.asp

The amount of money u earn off this is dependent on how big a position u have and how long u hold the position for.

Use the below calculator and bung in some numbers to get an idea.


http://fxtrade.oanda.com/tools/fxcalculators/interest_calculator

 

[profit13]

Where can I cram more nearly Forex?